Price vs. Value of a Quilt, Part 2

As discussed in yesterday’s post, Price vs. Value Part 1, some quilters want to sell their quilts for costs, and include a profit. Others have no interest in that. My hope today is to provide a point of education for quilters of both types, and for non-quilters alike. Even when you give a quilt as a gift, you might discuss with the receiver elements that went into it, so they can appreciate the magnitude of that gift. We’ve all heard stories of quilts that end up on garage sale tables for $25, or that pad the dog bed. Owners who value your work don’t do these things.

Those who do choose to sell can struggle with pricing.It’s easy to think of materials that go into a specific quilt, but there’s a lot more. These can be broken into direct costs and indirect costs. Direct costs are the materials and labor that directly go into a specific quilt. Indirect costs include overhead of space and equipment, or other costs that are harder to attribute to a specific quilt. All of these need to be considered to objectively value your quilt.

The list below is a) pretty complete, but if you think about it, you’ll come up with things I missed; and b) way too complete, as I don’t mean to scare you away! My intention is just to remind you that you pay for all this stuff, and all of it goes in your projects. And note, I am not an expert on taxes! Consult a tax professional about tracking your expenses for tax purposes. This is just for purposes of pricing.

In truth, some of these are pretty hard to track or attribute. You may have a washer and dryer, anyway, or a computer and internet access. And breaking out your studio electricity costs from other home energy costs may be difficult, at best. But these are costs of doing business.

So how to include all of this when pricing a quilt? Track your direct costs of materials. If the fabric you use in a quilt was already in inventory (stash,) remember you’ll need to replace that fabric in your inventory with new fabric, not necessarily on sale. Same with batting and thread. Keep a record of your time. Consider the value of your time as a skilled artisan. Skilled workers don’t work for minimum wage.

There are worksheets available in various places to record these. Start here with Sam Hunter’s We Are $ew Worth It post, which includes a sheet to track your time. In addition she has a sample invoice to demonstrate to buyers the expenses entailed in a quilt. And check Dana Jo Forseth’s spreadsheet, also. Dana Jo is an accountant and quilter.

Neither of these worksheets include recognition of those indirect costs, though. How do you add in the cost of wear and tear on your iron? Tough question. Many of those indirect costs are related to the time you spend, so perhaps you increase your wage to incorporate them. Or increase your applied “profit” margin to include them.

There are various ways to determine price. Here I’ll outline four of them.

1) Include all direct materials cost, multiply that cost by some factor, and price the quilt at the resulting figure. For example, your material costs are $100. You might choose a multiplier for that type of quilt of 3. (This is just an example, not a magic number.) Then 3 x $100 = $300, and that’s your price. This does not explicitly account for all those other costs, nor for profit. But you may find (after tracking your time on a few projects) that it works out fairly for you. Certainly it is more fair than taking $0 for your labor, overhead, and profit.

2) Track time and direct expenses on a worksheet or spreadsheet. Price your time as skilled labor (or better), in other words, at least twice minimum wage. Add an appropriate profit margin of 10-20%. For example, your materials cost $100. You put 20 hours into the quilt at $20 per hour, equalling $400. Materials plus labor is $500. Add a profit margin of 10%, or $50. The total is $550.

3) Track time and expenses on enough quilts of different types and sizes to understand value as it relates to size of the quilt. Price your quilt by the square inch or square foot. An alternative is to price by linear inch, rather than square inch. While this is the approach taken by many art quilters, it can also work well for “traditional” quilters. Here are two links to explain this approach more thoroughly than I can here. Cory Huff at the Abundant Artist lays out both square inch and linear pricing here. (Read the rest of his post, too. It applies just as well in our world as it does for painters.) And quilt artist Caryl Bryer Fallert-Gentry of Bryerpatch Studio discusses the issues, including galleries, consignments, and installations here.

4) Have your quilts appraised by a certified, professional quilt appraiser. While this adds to the expense (which could be included in the price), it assures the buyer of value.

All four of these approaches include some level of pain, if only in counting your direct material costs. However, if you choose to be a businessperson, creating and selling your products, you will find power in valuing your own work correctly, and you will empower your clients as they understand the work they are buying.

I’d love to hear your thoughts on this. How do you determine prices for the quilts you sell?

If you’d like to read my posts on quilting as a business, you can find them here:

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7 thoughts on “Price vs. Value of a Quilt, Part 2”

Your calculations take me back to my days with a consulting firm. Part of my job was to write proposals for work, so of course that included a budget. You better believe indirect costs were factored in, usually as a percentage of all the direct costs. Honestly, it’s just easier to use a percentage, once you figure that percentage out. Your list of what that could include is a great place to begin. And if you’ve ever looked at the indirect costs in academic research proposals you’d see the percentage is often greater than 100.

I haven’t done proposals from that standpoint, but I’ve made my share of sales pitches, asking for business and detailing price for prospective clients. Glad to know I’m on the right track with this. I’ve studied accounting but frankly, it was one of my least favorite subjects and I didn’t take more than I needed to.

Your list takes me back to my “budget” days with the government….good post Melanie. Creating a value of our workmanship and product, takes both time and lots of research and effort. Your post breaks it down for anyone so wanting to take on that challenge.

Unless a person has dedicated, separate studio space and only keeps overhead there, and only works there during defined times, we’ll never get it completely right. But we can move in that direction with a little thought. Thanks.

I doubt if I’d ever go through the whole process you describe (too lazy!) but just seeing the lists of direct and indirect costs is a good reminder of how much goes into the making of anything. Seeing all this helps me realize the value of the work I’m doing.

Your lists are a good reminder to anyone trying to add income by making quilts for hire. Often my friends forget about the “intangible” costs like machine maintenance, cost of their tools, and electricity and the space in their home taken up by the tools required to do the project.

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